diff --git a/apps/governance-service/scripts/setup-database.sql b/apps/governance-service/scripts/setup-database.sql
new file mode 100644
index 00000000..337b4b28
--- /dev/null
+++ b/apps/governance-service/scripts/setup-database.sql
@@ -0,0 +1,19 @@
+-- Setup database for Governance service
+
+-- Create database
+CREATE DATABASE aitbc_governance;
+
+-- Create user
+CREATE USER aitbc_governance WITH PASSWORD 'password';
+
+-- Grant privileges
+GRANT ALL PRIVILEGES ON DATABASE aitbc_governance TO aitbc_governance;
+
+-- Connect to the database
+\c aitbc_governance
+
+-- Grant schema privileges
+GRANT ALL ON SCHEMA public TO aitbc_governance;
+
+-- Exit
+\q
diff --git a/apps/governance-service/src/governance_service/main.py b/apps/governance-service/src/governance_service/main.py
index 49dae60d..d9dc72f2 100644
--- a/apps/governance-service/src/governance_service/main.py
+++ b/apps/governance-service/src/governance_service/main.py
@@ -6,8 +6,9 @@ Manages governance operations
 from contextlib import asynccontextmanager
 from typing import AsyncIterator
 
-from fastapi import FastAPI
+from fastapi import FastAPI, Depends
 from pydantic import BaseModel
+from sqlalchemy.ext.asyncio import AsyncSession
 
 from aitbc import (
     configure_logging,
@@ -18,6 +19,9 @@ from aitbc import (
     ErrorHandlerMiddleware,
 )
 
+from .storage import init_db, get_session
+from .services.governance_service import GovernanceService
+
 # Configure structured logging
 configure_logging(level="INFO")
 logger = get_logger(__name__)
@@ -27,6 +31,7 @@ logger = get_logger(__name__)
 async def lifespan(app: FastAPI) -> AsyncIterator[None]:
     """Lifecycle events for the Governance Service."""
     logger.info("Starting Governance Service")
+    await init_db()
     yield
     logger.info("Shutting down Governance Service")
 
@@ -67,6 +72,104 @@ async def governance_status() -> dict[str, str]:
     }
 
 
+async def get_governance_service(session: AsyncSession = Depends(get_session)) -> GovernanceService:
+    """Get governance service instance"""
+    return GovernanceService(session)
+
+
+@app.get("/v1/governance/profiles")
+async def get_profiles(
+    role: str | None = None,
+    user_id: str | None = None,
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Get governance profiles"""
+    return svc.list_profiles(role=role, user_id=user_id)
+
+
+@app.get("/v1/governance/profiles/{profile_id}")
+async def get_profile(
+    profile_id: str,
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Get a specific governance profile"""
+    return svc.get_profile(profile_id)
+
+
+@app.post("/v1/governance/profiles")
+async def create_profile(
+    profile_data: dict,
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Create a new governance profile"""
+    return svc.create_profile(profile_data)
+
+
+@app.get("/v1/governance/proposals")
+async def get_proposals(
+    status: str | None = None,
+    category: str | None = None,
+    proposer_id: str | None = None,
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Get governance proposals"""
+    return svc.list_proposals(status=status, category=category, proposer_id=proposer_id)
+
+
+@app.get("/v1/governance/proposals/{proposal_id}")
+async def get_proposal(
+    proposal_id: str,
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Get a specific proposal"""
+    return svc.get_proposal(proposal_id)
+
+
+@app.post("/v1/governance/proposals")
+async def create_proposal(
+    proposal_data: dict,
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Create a new proposal"""
+    return svc.create_proposal(proposal_data)
+
+
+@app.get("/v1/governance/votes")
+async def get_votes(
+    proposal_id: str | None = None,
+    voter_id: str | None = None,
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Get votes"""
+    return svc.list_votes(proposal_id=proposal_id, voter_id=voter_id)
+
+
+@app.post("/v1/governance/votes")
+async def create_vote(
+    vote_data: dict,
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Create a new vote"""
+    return svc.create_vote(vote_data)
+
+
+@app.get("/v1/governance/treasury")
+async def get_treasury(
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Get DAO treasury"""
+    return svc.get_treasury()
+
+
+@app.get("/v1/governance/analytics")
+async def get_analytics(
+    period: str = "monthly",
+    svc: GovernanceService = Depends(get_governance_service),
+):
+    """Get governance analytics"""
+    return await svc.get_analytics(period=period)
+
+
 if __name__ == "__main__":
     import uvicorn
     uvicorn.run(app, host="0.0.0.0", port=8105)
diff --git a/apps/governance-service/src/governance_service/services/__init__.py b/apps/governance-service/src/governance_service/services/__init__.py
new file mode 100644
index 00000000..56d4c980
--- /dev/null
+++ b/apps/governance-service/src/governance_service/services/__init__.py
@@ -0,0 +1,7 @@
+"""
+Governance Service services
+"""
+
+from .governance_service import GovernanceService
+
+__all__ = ["GovernanceService"]
diff --git a/apps/governance-service/src/governance_service/services/governance_service.py b/apps/governance-service/src/governance_service/services/governance_service.py
new file mode 100644
index 00000000..56e21c93
--- /dev/null
+++ b/apps/governance-service/src/governance_service/services/governance_service.py
@@ -0,0 +1,109 @@
+"""
+Governance service for managing governance operations
+"""
+
+from typing import Any
+
+from sqlmodel import Session, select
+
+from ..domain.governance import GovernanceProfile, Proposal, Vote, DaoTreasury
+
+
+class GovernanceService:
+    def __init__(self, session: Session):
+        self.session = session
+
+    def list_profiles(
+        self,
+        role: str | None = None,
+        user_id: str | None = None,
+    ) -> list[GovernanceProfile]:
+        """List governance profiles"""
+        stmt = select(GovernanceProfile)
+        if role:
+            stmt = stmt.where(GovernanceProfile.role == role)
+        if user_id:
+            stmt = stmt.where(GovernanceProfile.user_id == user_id)
+        return list(self.session.execute(stmt).all())
+
+    def get_profile(self, profile_id: str) -> GovernanceProfile | None:
+        """Get a specific governance profile"""
+        stmt = select(GovernanceProfile).where(GovernanceProfile.profile_id == profile_id)
+        result = self.session.execute(stmt).first()
+        return result[0] if result else None
+
+    def create_profile(self, profile_data: dict) -> GovernanceProfile:
+        """Create a new governance profile"""
+        profile = GovernanceProfile(**profile_data)
+        self.session.add(profile)
+        self.session.commit()
+        self.session.refresh(profile)
+        return profile
+
+    def list_proposals(
+        self,
+        status: str | None = None,
+        category: str | None = None,
+        proposer_id: str | None = None,
+    ) -> list[Proposal]:
+        """List governance proposals"""
+        stmt = select(Proposal)
+        if status:
+            stmt = stmt.where(Proposal.status == status)
+        if category:
+            stmt = stmt.where(Proposal.category == category)
+        if proposer_id:
+            stmt = stmt.where(Proposal.proposer_id == proposer_id)
+        return list(self.session.execute(stmt).all())
+
+    def get_proposal(self, proposal_id: str) -> Proposal | None:
+        """Get a specific proposal"""
+        stmt = select(Proposal).where(Proposal.proposal_id == proposal_id)
+        result = self.session.execute(stmt).first()
+        return result[0] if result else None
+
+    def create_proposal(self, proposal_data: dict) -> Proposal:
+        """Create a new proposal"""
+        proposal = Proposal(**proposal_data)
+        self.session.add(proposal)
+        self.session.commit()
+        self.session.refresh(proposal)
+        return proposal
+
+    def list_votes(
+        self,
+        proposal_id: str | None = None,
+        voter_id: str | None = None,
+    ) -> list[Vote]:
+        """List votes"""
+        stmt = select(Vote)
+        if proposal_id:
+            stmt = stmt.where(Vote.proposal_id == proposal_id)
+        if voter_id:
+            stmt = stmt.where(Vote.voter_id == voter_id)
+        return list(self.session.execute(stmt).all())
+
+    def create_vote(self, vote_data: dict) -> Vote:
+        """Create a new vote"""
+        vote = Vote(**vote_data)
+        self.session.add(vote)
+        self.session.commit()
+        self.session.refresh(vote)
+        return vote
+
+    def get_treasury(self) -> DaoTreasury | None:
+        """Get DAO treasury"""
+        stmt = select(DaoTreasury).where(DaoTreasury.treasury_id == "main_treasury")
+        result = self.session.execute(stmt).first()
+        return result[0] if result else None
+
+    async def get_analytics(self, period: str = "monthly") -> dict[str, Any]:
+        """Get governance analytics"""
+        # Placeholder for analytics logic
+        return {
+            "period": period,
+            "total_proposals": 0,
+            "active_proposals": 0,
+            "passed_proposals": 0,
+            "total_votes": 0,
+        }
diff --git a/apps/governance-service/src/governance_service/storage.py b/apps/governance-service/src/governance_service/storage.py
new file mode 100644
index 00000000..264a03ed
--- /dev/null
+++ b/apps/governance-service/src/governance_service/storage.py
@@ -0,0 +1,42 @@
+"""
+Database session management for Governance service
+"""
+
+from contextlib import asynccontextmanager
+from typing import AsyncIterator
+
+from sqlalchemy.ext.asyncio import AsyncSession, create_async_engine
+from sqlmodel import SQLModel
+
+from aitbc import get_logger
+
+logger = get_logger(__name__)
+
+# Database URL from environment variable or default
+DATABASE_URL = "postgresql+asyncpg://aitbc_governance:password@localhost:5432/aitbc_governance"
+
+# Create async engine
+engine = create_async_engine(DATABASE_URL, echo=False)
+
+
+async def init_db() -> None:
+    """Initialize database tables"""
+    from .domain.governance import (
+        GovernanceProfile,
+        Proposal,
+        Vote,
+        DaoTreasury,
+        TransparencyReport,
+    )
+    
+    async with engine.begin() as conn:
+        await conn.run_sync(SQLModel.metadata.create_all)
+    
+    logger.info("Governance service database initialized")
+
+
+@asynccontextmanager
+async def get_session() -> AsyncIterator[AsyncSession]:
+    """Get database session"""
+    async with AsyncSession(engine) as session:
+        yield session